Manufacturing sector contributes nearly 17% to India’s GDP in FY19. Considering the plans underway, the contribution is likely to grow to 25% by FY25. India’s demographics and the rising levels of income make us a compelling proposition for the manufacturers across the globe. While FDI (Foreign Direct Investments) and global manufacturers are keen to play a role in this market with a robust future, our governments have been launching programmes to boost the sector. Make in India, reforms in labour laws, skill development initiatives, focus on ease of doing business and improvements in transport infrastructure are some of the programmes. The opportunity at hand is in the here and now. How can the manufacturing companies make the most of these? What role HR can play in this transformation?
Need the right environment
India had a thriving manufacturing economy in the 18th and 19th century. We lost our way due to the unfavourable policies during the British period and the changing world order in terms of technology, skills and investments. We need the enablement that makes us relevant and competitive in the world market.
Services industry in India has grown since the ’90s because entrepreneurs had the ideas and the determination to put the ideas into action. They could access the required capital, take advantage of talent supply in terms of the educated youth India was producing then, find their way through the corridors of power to amenable outcomes and exploit the market opportunities.
The manufacturing industry is seeing market demand for domestic consumption as well as exports. It needs the enablement in terms of access to funds at the right cost of capital; availability of skilled talent, fair legal system concerning labour, land and taxes. They need consistent implementation of the laws. The sector needs robust infrastructure for transportation of goods and cost-effective inputs for production.
Most of these fall in the realm of a policy framework which manufacturers can collaboratively work with the governing bodies to develop and transform. Leaders have this critical role to play in public affairs. What else can their HR Teams do?
Collaboration with stakeholders in the ecosystem is critical
The ecosystem of a manufacturing company is complex, right from suppliers, partners and distributors to employees, technology partners, training institutes and government bodies. An organisation’s success depends upon how well one is able to leverage all these stakeholders.
The HR team can play a role in nurturing some of these relations and shaping the future of the talent supply pipeline to the organisation. At the same time, one can build timeless value for the employer brand by the behaviours one demonstrates over a period of time. Introducing real-life practical projects to the students in the institutions, guiding students through those, shaping the curriculum to providing probationary work opportunities are possibilities.
Similarly, HR team can help the supplier organisations apply the best practices to attract, develop and retain best talent and enhance performance results. These would help the supplier bring its costs down and improve its sustainability, thus deepening the strategic engagement between the two organisations. This will ultimately benefit the organisation.
Similarly, one can work in industry bodies and peer groups to spread the best practices and help the players in the ecosystem to get better and raise the bar consistently. Like Toyota Production System and many other quality initiatives like kaizen, Kanban, six sigma, lean etc have become commonplace, HR can collaborate with the others in solving a range of challenges.
Firstly align with business
Every business has its own context and hence, its unique priorities. Hence, mindless copy-paste of best practices might not yield the desired results. For example, an organisation in expansion mode is executing its growth plans while another in diversification needs work on culture-building apart from the growth. Someone might be facing challenges from cost leaders in the market and hence is looking to revamp its technology, marketing and costing strategies. Our HR strategies have to align these and behaviours have to emerge from these plans.
India’s manufacturing output is merely 3% of the world’s output while countries like China, US, Japan, South Germany and Korea do a lot more. Countries like Vietnam and Taiwan have already emerged as strong hubs. Bangladesh is already a large hub for textiles; we could see many other countries emerge as such strong hubs in the time ahead. India has a strong domestic market and the strength of democratic processes, talent supply and supply chain.
All the stakeholders need to work harmoniously for India to take a quantum leap in its manufacturing output.
